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Lines sucking boxship market dry of small to midsize vessels

The charter market is facing a looming shortage of small and midsize boxships.

That could further lift the charter market for vessels in the 1,000-teu to 5,300-teu range, where rates have jumped by as much as 50% in the year to date.

Rates for traditional panamaxes of 4,400 teu have risen from $8,000 per day to $12,000 per day in the year to date, while feeder vessels of 1,700 teu to 2,750 teu have seen an improvement of 20% to 32%, according to figures from Clarksons.

That has led to talk of an impending shortage, with the market facing a shortfall of between 400 and 1,200 feeder vessels by the end of 2020, according to Danish analyst SeaIntel.

It estimates that there will be an average of just 5.4 vessels for every large containership over 11,000 teu by the end of 2020 — down from 7.9 feeder vessels at present.

“It is clear that in the absence of any additional feeder vessel ordering, we will very likely see an increase in the premium for feeder tonnage,” SeaIntel chief executive Alan Murphy said.

Similarly, narrow-beam containerships of 4,000 teu to 5,300 teu — or traditional panamaxes — continue to defy predictions, with only one 4,100-teu vessel in a prompt position in the Middle East and two maxi-panamax units of 5,000 teu in lay up in South East Asia, according to Alphaliner.

That has further lifted the market, with the 4,255-teu Hobby Hunter (built 2009) reportedly receiving $12,850 per day after being taken on direct continuation by Cosco Shipping for four to six months — up from $8,500 per day when it was fixed in October 2017.

Alphaliner attributes the change in fortunes to the high level of scrapping seen in the past two years, with 74 units of 4,000 teu to 5,100 teu scrapped since May 2016 — about 9% of the fleet — as well as the sale of 30 units to Chinese owners for exclusive use on domestic trades.

It notes that scrappings have almost disappeared, with only one panamax ship broken up since November 2017.

“Quite remarkably, a shortage of classic panamax vessels is now looming,” Alphaliner said. “The astonishing turnaround of this segment, which, back in October 2016 counted over 90 vessels in search of new employment, epitomises the fast recovery [that] the charter market has been enjoying since the beginning of 2017.”

The improving charter market has reduced the idle fleet to just 1% of the total cellular fleet — to only 83 units for a total of 224,240 teu.

The recovery of the charter market is expected to continue in the short and medium-term as demand for tonnage of all sizes is showing no signs of weakening, Alphaliner says.

It points to the recent improvement in cargo rates observed on a number of East-West and North-South routes, after weeks of continuously falling prices, as a further positive signal for the market.

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Lines sucking boxship market dry of small to midsize vessels

The charter market is facing a looming shortage of small and midsize boxships.

That could further lift the charter market for vessels in the 1,000-teu to 5,300-teu range, where rates have jumped by as much as 50% in the year to date.

Rates for traditional panamaxes of 4,400 teu have risen from $8,000 per day to $12,000 per day in the year to date, while feeder vessels of 1,700 teu to 2,750 teu have seen an improvement of 20% to 32%, according to figures from Clarksons.

That has led to talk of an impending shortage, with the market facing a shortfall of between 400 and 1,200 feeder vessels by the end of 2020, according to Danish analyst SeaIntel.

It estimates that there will be an average of just 5.4 vessels for every large containership over 11,000 teu by the end of 2020 — down from 7.9 feeder vessels at present.

“It is clear that in the absence of any additional feeder vessel ordering, we will very likely see an increase in the premium for feeder tonnage,” SeaIntel chief executive Alan Murphy said.

Similarly, narrow-beam containerships of 4,000 teu to 5,300 teu — or traditional panamaxes — continue to defy predictions, with only one 4,100-teu vessel in a prompt position in the Middle East and two maxi-panamax units of 5,000 teu in lay up in South East Asia, according to Alphaliner.

That has further lifted the market, with the 4,255-teu Hobby Hunter (built 2009) reportedly receiving $12,850 per day after being taken on direct continuation by Cosco Shipping for four to six months — up from $8,500 per day when it was fixed in October 2017.

Alphaliner attributes the change in fortunes to the high level of scrapping seen in the past two years, with 74 units of 4,000 teu to 5,100 teu scrapped since May 2016 — about 9% of the fleet — as well as the sale of 30 units to Chinese owners for exclusive use on domestic trades.

It notes that scrappings have almost disappeared, with only one panamax ship broken up since November 2017.

“Quite remarkably, a shortage of classic panamax vessels is now looming,” Alphaliner said. “The astonishing turnaround of this segment, which, back in October 2016 counted over 90 vessels in search of new employment, epitomises the fast recovery [that] the charter market has been enjoying since the beginning of 2017.”

The improving charter market has reduced the idle fleet to just 1% of the total cellular fleet — to only 83 units for a total of 224,240 teu.

The recovery of the charter market is expected to continue in the short and medium-term as demand for tonnage of all sizes is showing no signs of weakening, Alphaliner says.

It points to the recent improvement in cargo rates observed on a number of East-West and North-South routes, after weeks of continuously falling prices, as a further positive signal for the market.